XML 53 R16.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes
3 Months Ended
May 03, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company’s income tax expense during the thirteen-week period ended May 3, 2014 was $17,000 on a pretax loss from continuing operations (inclusive of equity method investment income/loss) of $6.0 million, representing an effective tax rate of (0.3)%. In comparison, the Company’s income tax benefit during the thirteen-week period ended May 4, 2013 was $2.0 million on a pretax loss from continuing operations (inclusive of equity method investment income/loss) of $5.7 million, representing an effective tax rate of 35.5%.
The effective tax rate of (0.3)% during the thirteen-week period ended May 3, 2014 primarily resulted from state income taxes. No income tax benefit was recognized for an increase in deferred tax assets because the valuation allowance against the Company’s deferred tax assets was increased by $2.2 million. The valuation allowance was increased because the Company has determined, based on the weight of all available positive and negative evidence, it was more likely than not that such deferred assets would not be realized in the future.
The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to fiscal 2011. With respect to state and local jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for fiscal years prior to fiscal 2010.
As of May 3, 2014, the gross amount of unrecognized tax benefits, inclusive of estimated interest and penalties, due to uncertain tax positions was $0.4 million, all of which would affect the effective tax rate if recognized. The Company recognizes accrued estimated interest and penalties related to unrecognized tax benefits in income tax expense. The Company had approximately $0.2 million and $0.4 million, respectively, in estimated interest and penalties related to unrecognized tax benefits accrued as of May 3, 2014 and May 4, 2013.